Eli Lilly and Co. announced last month that it has entered into settlement
agreements with attorneys representing thousands of patients who claim they
were harmed by the company's second-generation antipsychotic medication,
Zyprexa (olanzapine). All told, the settlements could amount to payouts
equaling $1.2 billion.
The company has been entangled in a legal maelstrom for more than three
years, facing numerous product-liability civil lawsuits alleging the company
withheld or attempted to cover up data concerning questionable efficacy and a
strong association between taking olanzapine and significant weight gain,
which could lead to the development of diabetes and/or cardiovascular
Since the drug's approval in 1996, Zyprexa has been prescribed to about 20
million individuals worldwide, according to Lilly. Zyprexa is by far the
company's biggest seller, bringing in $4.2 billion in revenues in
2005—30 percent of the company's total revenues for the year.
A higher incidence of diabetes in patients taking olanzapine was apparent
to Lilly researchers early in development of the drug and was readily apparent
during the phase III clinical trials of the drug in the early to mid-1990s.
The first five of what would become thousands of lawsuits against the company
claiming that olanzapine caused patients' diabetes were filed in 2003.
The vast majority of the individual civil claims against Lilly were
consolidated into a class action by the Federal District Court for the Eastern
District of New York. The company is specifically accused of with-holding data
questioning Zyprexa's effectiveness compared with other antipsychotic
medications and minimizing or covering up data regarding serious side effects
associated with the drug.
At press time, Lilly was also facing ongoing criminal investigations in at
least five states—New York, Florida, Pennsylvania, Illinois, and
Vermont—regarding accusations that the company illegally and
aggressively marketed the product for unapproved uses, resulting in hundreds
of millions of dollars in extra costs for individuals, insurance companies,
and taxpayers who fund the state/federal partnership, Medicaid.
Although Lilly did not respond to requests from Psychiatric News
for input on this article, the company denies the allegations in statements on
a new Web site. Lilly says it launched the site "to give the public
factual information about the legal issues that confront the company's
atypical antipsychotic, Zyprexa."
The Web site notes that "[f]rom the day that Zyprexa was first
marketed, the labeling provided to physicians identified the potentially
clinically significant weight gain that was observed in more than half of all
patients treated long term with Zyprexa, as well as the diabetes-related
adverse events observed in clinical trials."
The Web site also says, "Lilly's Company policy, which is endorsed by
senior management, has always supported full disclosure of adverse-event
information on Zyprexa, and all Lilly medicines, to the FDA."
Lilly stated that it entered into settlement agreements "to resolve
the vast majority of remaining product-liability claims against Lilly relating
to [Zyprexa]." The agreements follow a June 2005 "master
settlement agreement" that covered approximately 8,000 individual claims
against the company, bringing the total claims subject to out-of-court
settlements to more than 18,000.
As a condition of the 2005 settlements, Lilly paid about $700 million to
claimants. The latest settlement agreement, according to a company statement,
should amount to "substantially less" in payments. While the exact
amount is under review, the company said "it is not expected to exceed
In a statement announcing the latest round of settlements on January 4,
Lilly Chair and Chief Executive Officer Sidney Taurel, noted, "While we
remain confident that these claims are without merit, we took this difficult
step because we believe it is in the best interest of the company, the
patients who depend on this medication, and their physicians."
The decision to resolve the claims, Taurel added, "does not change
the fact that Zyprexa has [improved], and will continue to improve, the lives
of millions of patients around the world."
Attorneys representing the consolidated claims had been in negotiations
with the company since last fall, attempting to reach out-of-court
settlements. Those negotiations were significantly influenced when a large
number of sensitive internal documents compiled by the company during the
discovery phase of the litigation were leaked to New York Times
business reporter Alex Berenson and a number of organizations involved in
mental health issues.
The documents had been placed under seal by the court but were provided to
the Times and the other organizations by an attorney who was not
directly involved in the product-liability suits, but who represents mentally
ill patients subject to state-mandated treatment with psychiatric
Berenson subsequently wrote a series of articles based on the hundreds of
pages of leaked documents, comprised of company letters, e-mails, memos,
presentations, and reports.
Shortly after Berenson's New York Times articles appeared, the
documents were posted on numerous Web sites, including many outside the United
States. A search for "Lilly lawsuit documents" conducted by
Psychiatric News the week of January 8 produced multiple links to Web
sites where the documents could be downloaded.
The documents provide evidence of a number of actions by Lilly or its
employees that are damaging to the defense of its positions in the law
In a prepared statement, Lilly said it "vigorously objects to the
characterization of company practices in [the] New York Times
article[s] based on selective documents illegally leaked by plaintiffs'
Lilly went on to say that the Times articles failed to mention
that the leaked documents "are a tiny fraction of the more than 11
million pages of documents provided by Lilly as part of the litigation
process. They do not accurately portray Lilly's conduct."
In a letter to the editor submitted to the New York Times, APA
President Pedro Ruiz, M.D., acknowledged that the Times articles
raise "important and troubling questions." Ruiz wrote,"
Physicians and patients need as much information as possible about the
risks and benefits of medications. America needs an open, mandatory, public
database of all clinical trials now."
The New York Times' articles detailing the leaked Lilly
documents can be accessed for a fee at<www.nytimes.com>.
Lilly's response to the lawsuits and information on Zyprexa are posted at<www.zyprexafacts.com>.▪